Dashboard Insightshttps://www.autoindustrylawblog.com
Emerging legal and business developments for the automotive industryTue, 07 May 2019 08:00:05 +0000en-UShourly1https://wordpress.org/?v=4.9.10https://dashboardinsights.foleylardnerblogs.com/wp-content/uploads/sites/8/2018/04/cropped-foley-site-icon-32x32.pngDashboard Insightshttps://www.autoindustrylawblog.com
3232A Patent War Without Fighting?http://feeds.lexblog.com/~r/dashboardinsights/full/~3/eX6Kov_sjaE/
https://www.autoindustrylawblog.com/2019/05/07/a-patent-war-without-fighting/#respondTue, 07 May 2019 08:00:05 +0000https://www.autoindustrylawblog.com/?p=3958
Either as a lesson from the smartphone patent wars, or a non-confrontational culture, automakers are keen to avoid patent wars as they computerize their vehicles. However, in an effort to capture as much of the electric and/or autonomous vehicle market as possible and drive demand for their vehicles, the automotive industry appears to be revamping...… Continue reading this entry]]>

Either as a lesson from the smartphone patent wars, or a non-confrontational culture, automakers are keen to avoid patent wars as they computerize their vehicles. However, in an effort to capture as much of the electric and/or autonomous vehicle market as possible and drive demand for their vehicles, the automotive industry appears to be revamping its business strategy when it comes to leveraging their patent portfolios.

Historically, companies attempted to capture market share by asserting large patent portfolios around commercially valuable features in order to exclude rivals. Innovative new technologies poised for large-scale market adoption typically correspond with a heavy uptick of patent filings. Within five years of Apple launching the first iPhone, one out of six active patents was smartphone-related in October 2012, representing more than 250,000 patents. To increase market share, companies asserted their patents against rivals, sometimes in drawn-out battles resulting in large damages awards.

That’s one way to use patents. Automakers, however, may now be avoiding patent wars for various reasons, including insufficient market adoption of electric and/or autonomous vehicles to warrant such large scale patent wars. Instead of asserting patents at this time, some companies with large electric and/or autonomous vehicle patent portfolios have evolved their business strategy to include using patents as a way to tempt rivals into entering the market and spur growth, thereby indirectly increasing demand for their products.

While automakers are avoiding patent wars for the time being, they have by no means abandoned leveraging their patent portfolios to reach their business goals. And when the stakes get high enough, which could be within a decade based on projections of $500 billion for electric vehicles and $60 billion for autonomous vehicles, they may yet revert to patent wars.

]]>https://www.autoindustrylawblog.com/2019/05/07/a-patent-war-without-fighting/feed/0https://www.autoindustrylawblog.com/2019/05/07/a-patent-war-without-fighting/If You Build It, Will They Come?http://feeds.lexblog.com/~r/dashboardinsights/full/~3/ZmM7vWSUTxs/
https://www.autoindustrylawblog.com/2019/05/02/if-you-build-it-will-they-come/#respondThu, 02 May 2019 08:00:41 +0000https://www.autoindustrylawblog.com/?p=3954
What if the automotive industry builds autonomous vehicles and no one wants them? What if no one trusts them well enough to want to own one or ride in one? This is precisely what was addressed at the recent World Congress Experience. The lack of regulations, be they national, state, regional or local is definitely...… Continue reading this entry]]>

What if the automotive industry builds autonomous vehicles and no one wants them? What if no one trusts them well enough to want to own one or ride in one? This is precisely what was addressed at the recent World Congress Experience. The lack of regulations, be they national, state, regional or local is definitely a hindrance to the adoption of a more autonomous future.

Even if regulations get drafted here and there, they may not be consistent from location to location. This can be as bad as not having regulations at all. Developing and manufacturing a vehicle that will adhere to regulations in one county while not meeting them in another state is not cost effective. In fact, it is likely cost prohibitive.

How and when regulations should be drafted is not necessarily an easy question to answer. Write regulations too early, and they may not address the vehicles that actually end up on the street. Write regulations too late, and a variety of “standards” may already be in production or in people’s hands.

To help move the industry in a common direction, SAE International has established the Automated Vehicle Safety Consortium. This Consortium, joined by Ford, GM and Toyota, will:

work to help safely advance the testing, precompetitive development, and deployment of SAE Level 4 and 5 automated vehicles. The AVSC will provide a safety framework around which autonomous technology can responsibly evolve in advance of broad deployment, ultimately helping to inform and accelerate the development of industry standards for autonomous vehicles (AVs) and harmonize with efforts of other consortia and standards bodies.

The consortium will leverage the expertise of current and future members to establish a set of AV safety guiding principles to help inform standards development. The first output from the AVSC will be a roadmap of priorities, applicable to developers, manufacturers, and integrators of automated vehicle technology and focusing on data sharing, vehicle interaction with other road users, and safe testing guidelines.

These are lofty goals and might help lead the industry in the right direction. It would allow the industry to take a step toward self-regulation or at least toward taking an active role in writing the rules by which the industry would have to play. Having the industry so involved is certainly a good idea. Adding other stakeholders may further benefit the industry to get a broad perspective on the issues that it will face.

The Autonomous future seems to inch closer every day. But we are still a long way from seeing what it will look like. We are equally far from knowing if people will fully embrace this new technology, especially if they lack the confidence in its safety and efficacy.

]]>https://www.autoindustrylawblog.com/2019/05/02/if-you-build-it-will-they-come/feed/0https://www.autoindustrylawblog.com/2019/05/02/if-you-build-it-will-they-come/Modernizing Our Grid Infrastructure and Business Models to Meet Increasing Electric Vehicle Demandhttp://feeds.lexblog.com/~r/dashboardinsights/full/~3/yYy5BWhB4eY/
https://www.autoindustrylawblog.com/2019/04/30/modernizing-our-grid-infrastructure-and-business-models-to-meet-increasing-electric-vehicle-demand/#respondTue, 30 Apr 2019 08:00:20 +0000https://www.autoindustrylawblog.com/?p=3950
Guest Author: Jim Saber, President & CEO – NextEnergy If you follow the developing electric mobility industry, you will find articles and announcements on new concept and production vehicles, battery technologies to improve vehicle range, electric vehicle charging networks, mobility services, etc. on a daily basis. It is a race to bring to the market new...… Continue reading this entry]]>

Guest Author: Jim Saber, President & CEO – NextEnergy

If you follow the developing electric mobility industry, you will find articles and announcements on new concept and production vehicles, battery technologies to improve vehicle range, electric vehicle charging networks, mobility services, etc. on a daily basis. It is a race to bring to the market new vehicles and services which appeal to consumers and satisfy regulators and policy makers.

While the electric vehicle (EV) industry is in still in the early stages, it is primed for significant growth in the next five to seven years. Recent articles have predicted that EVs will be cheaper to purchase than internal combustion engine vehicles by 2025. With more EVs expected in the near future, more activity needs to occur in charging and infrastructure to ensure a seamless travel and user experience. Vehicle electrification can also reverse a decade-long trend of flat demand growth for electric utilities. However, the programs and business model development has been slow in this historically conservative industry. A recent Smart Electric Power Alliance report Utilities and Electric Vehicles: Evolving to Unlock Grid Value found that 74% of utilities were in the early stage of EV programs, 23% were in the intermediate stage, and 3% were in late stages; each stage was determined based on level of consumer engagement, as well as availability of incentives and rate programs.

In 2017, 43 state governments and the District of Columbia worked on 227 pieces of legislation that included the regulation of EVs, study or investigation of EVs, incentive programs, charging infrastructure, and new utility rates for EV charging.

In Q3 2018 alone, a total of 276 grid modernization actions were taken, representing a 50% increase over Q3 2017.

Clearly, states and utilities are working to accelerate their programs. Leader states can help lagging states and their associated utilities by determining the best way to spend their time and money, but models of success have been, and are being developed so replication at scale can happen now.

As states and utilities are increasing their activity to support the growth of EVs, a few areas of future focus are:

Future ownership and operation of the charging stations. States are developing programs and positions on utility ownership and operation of EV charging stations. Utilities are most familiar with the local electrical grid and have the expertise to operate the stations in a manner which increase stability and efficiency of the systems which can be an advantage. Utility ownership and operation may also limit retail competition and negatively impact EV owners in the future.

The sale of electricity via EV charging stations. Since the EV charging station is not a generator (similar to a solar panel), many states are piloting the ability for the station operator to sell the electricity that goes to the charge the vehicle. This can lead to increased revenue for the operator and if taxed properly, a source of funding for the state to replace fuel taxes. Some have concerns over the potential for significant fluctuation in pricing.

Experimental rates for DC fast charging systems which minimize demand charges. Owners of DC fast charging stations are typically billed on a utility’s general service tariff with a three-part rate, including per-kWh energy charges, a demand charge, and a fixed charge. The fast charging nature of these stations results in high demand charges on owners’ bills, which can be a deterrent to developing this infrastructure. To overcome this obstacle and encourage the build-out of DC fast chargers, several utilities are proposing demand charge alternatives for the owners of fast charging stations.

As states and utilities go from early to late stages of the policies and programs to support electric vehicles, the opportunities for business to invest and participate in new added-value services will become clearer, and the value of electrified mobility will be more easily realized by consumers.

Guest Author: Jim Saber, President & CEO – NextEnergy Center. NextEnergy is a non-profit corporation based in Detroit, Michigan that works with innovators to accelerate smarter, cleaner, more accessible solutions for communities and cities.

]]>https://www.autoindustrylawblog.com/2019/04/30/modernizing-our-grid-infrastructure-and-business-models-to-meet-increasing-electric-vehicle-demand/feed/0https://www.autoindustrylawblog.com/2019/04/30/modernizing-our-grid-infrastructure-and-business-models-to-meet-increasing-electric-vehicle-demand/Manufacturing MarketTrends | April 2019, Issue 1http://feeds.lexblog.com/~r/dashboardinsights/full/~3/rf7EMT2ROmE/
https://www.autoindustrylawblog.com/2019/04/25/manufacturing-markettrends-april-2019-issue-1/#respondThu, 25 Apr 2019 08:00:03 +0000https://www.autoindustrylawblog.com/?p=3945
Welcome to Foley’s new Manufacturing MarketTrends newsletter. In each edition, we will highlight key trends to watch out for in 2019, making it a year of change for manufacturers. Know Your Supply Chain If a company fails to know its supply chain, it can find itself getting burned in many ways, including responsibility for upstream...… Continue reading this entry]]>

Welcome to Foley’s new Manufacturing MarketTrends newsletter. In each edition, we will highlight key trends to watch out for in 2019, making it a year of change for manufacturers.

Know Your Supply Chain

If a company fails to know its supply chain, it can find itself getting burned in many ways, including responsibility for upstream use of forced labor or downstream sales to an export-restricted company. One of the most common ways that a company may find itself in trouble is by failing to ensure that the obligations it is undertaking in its agreements with customers are backed up by the rights it is receiving in its agreements with suppliers.

As a simplified example, if a company is warranting to its customer that products do X, Y and Z, then the company should ensure that the suppliers of its products are warranting that they do X, Y and Z. Further, if a company’s sole and exclusive remedy for a defective product from its supplier is replacement of the product or a refund of the purchase price, then the company should ensure that its agreements with customers correspondingly limit the company’s responsibility.

Even if the company’s supply chain contracts are perfectly symmetrical, if the company cannot collect from its supplier (due to the supplier’s insolvency or otherwise), then the symmetrical contracts do little good. Thus, a company must also (i) know with whom it is entering into business, (ii) ensure its supplier’s creditworthiness, and (iii) require its supplier to maintain sufficient insurance to cover the supplier’s obligations under its agreement with the company.

Section 232 and 301 Tariffs

Many manufacturing companies were heartened by the announcement that the next tranche of section 301 tariffs on Chinese imports will be delayed following further progress in the negotiations between the U.S. and China. The existing section 232 and 301 tariffs still have had a major impact on manufacturers’ profit margins. Many companies cannot meet the requirements to obtain an exclusion. The 10 percent and 25 percent tariffs have seriously impacted manufacturers across a number of industries, including many that entered into long-term agreements for the sale of goods without any right to seek adjustments or price increases following the imposition of these tariffs.

How are these additional costs and risks flowing through the supply chain where there are fixed-price, long-term supply agreements? There have been a series of consequences that have reverberated through the supply chain. In the unlikely event that the contract contains a price adjustment clause or indexing or even a “good faith” obligation to renegotiate pricing, suppliers are exercising these clauses. Where contracts do not contemplate price adjustments (most do not), suppliers may be forced to make unilateral demands for price increases under a number of theories, such as claims of force majeure or commercial impracticability. Some suppliers have threatened to stop shipping products unless the buyer will increase prices or take over responsibility for importing the goods at issue as the importer of record. If the product is critical enough to the buyer’s supply chain and cannot be obtained from an alternate source, the buyer may have no choice but to acquiesce in the relief requested by the supplier, even if it falls outside of the parties’ contract and technically is a breach of the seller’s obligation to supply goods at a fixed price.

Whether on the sell side or the buy side, it is important that the manufacturer track all additional costs incurred as a result of the tariffs, any related demands or any cost relief. There may be an opportunity at the end of the parties’ agreement to recover some of these costs or, at least, negotiate more favorable terms for any future business.

OFAC Highlights the Importance of Supply Chain Due Diligence

Regulators at the Office of Foreign Assets Control (OFAC) have sent a near seven-figure message that companies need “full-spectrum” supply chain due diligence by assessing a $996,080 penalty on a California cosmetics company, e.l.f. Cosmetics (ELF), for purchasing false eyelash kits from suppliers in China that had sourced from North Korea, in alleged violation of the North Korea Sanctions Regulations, according to OFAC.

This enforcement action highlights the risks for companies that do not conduct full-spectrum supply chain due diligence when sourcing products from overseas, particularly in a region in which North Korea, as well as other comprehensively sanctioned countries, are known to export goods. OFAC encourages companies to develop, implement, and maintain a risk-based approach to sanctions compliance and to implement processes and procedures to identify and mitigate areas of risks. Such steps could include, but are not limited to, implementing supply chain audits with country-of-origin verification, conducting mandatory OFAC sanctions training for suppliers, and routinely performing audits of suppliers.

The Departments of Treasury, State, and Homeland Security also have highlighted North Korean “deceptive practices” that put U.S. supply chains at risk of legal violations. A special advisory titled “Risks for Businesses with Supply Chain Links to North Korea” states that North Korea often sends workers abroad to earn hard currency to send back to the North Korean government. U.S. firms that purchase goods made by these workers risk significant fines and having their imports seized at the border.

As the U.S. government concludes in its advisory, “[b]usinesses should closely examine their entire supply chain(s) for North Korean laborers and goods, services, or technology, and adopt appropriate due diligence best practices.” With OFAC also maintaining strict sanctions regimes against other countries and regions, governments, and specially designated persons, any firm that relies on an international supply chain needs to incorporate the types of supply chain best practices highlighted by the advisory and by OFAC in the ELF settlement.

Market Intelligence

Additive Manufacturing. Additive manufacturing, the process of building three-dimensional structures by adding layers of material through digital design, is no longer just wishful thinking; the number of enterprise-class three-dimensional printer manufacturers has tripled to 180 since 2016. Of manufacturers surveyed, 56.9 percent reported that they either already had, or planned to deploy within the next 36 months, some form of three-dimensional printing technology.

Additive manufacturing is no longer limited to building with plastics. For example, researchers at A*Star Singapore Institute of Manufacturing Technology have shown that additive manufacturing techniques can make a stronger version of a high-entropy alloy, cobalt-chromium-iron-nickel-manganese, allowing lower-cost manufacture of metal parts that have greater resistance to fracturing under harsh conditions.

And the reach of additive manufacturing is quite long. Boeing announced it has used additive manufacturing techniques to build control antennae for its AMOS 17 satellite. Bugatti uses selective laser melting, a form of additive manufacturing, to help create lightweight, strong parts for the Chiron sports car. In a trial taking place in the United Kingdom, additive manufacturing is being used to manufacture a titanium port for delivering microcatheters to target a region of the brain with a naturally-occurring protein that researchers think may reverse Parkinson’s Disease.

Cybersecurity. Remaining competitive and advancing requires manufacturers to rapidly implement new technologies, though they may be slow to recognize the associated cybersecurity risks. With complex systems, devices utilizing the IoT, and increasing connectivity to the Internet and third parties, manufacturers are creating new opportunities for cyberattack.

Manufacturing is as target rich as every other industry. Manufacturers maintain intellectual property, product and manufacturing designs and specifications, employee and customer data, financial information, and a host of other valuable assets. With ransomware, manufacturers may be even more at risk given that they are considered less cybersecure – which can make them prime bait for phishing an employee, gaining access to the network or dropping ransomware seeking a large payout. Often attacks start in one system and leapfrog across the network to compromise high-value targets in another system. Numerous manufacturers have had their production operations shut down, causing a massive ripple effect throughout their supply chain due to ransomware such as Notpetya, Samsam, and WannaCry.

Manufacturers need to become more cybersecure, which may require solutions such as multifactor authentication, log analysis, password rules, training, and access controls. Manufacturers should consider retiring programs and equipment that are considered end–of-life and no longer supported, leaving them exposed to known vulnerabilities. They should focus on event detection, which is more effective than seeking “absolute protection,” including secure log aggregation and security information, event management, and continuous security monitoring. Finally, manufacturers should improve their incident response capabilities, including pre-engaging with incident response and forensic providers to help support investigations.

An effective cyber strategy may require changing operational protocols. Many traditional in-house IT departments have an “if it ain’t broke, don’t fix it” mentality, leaving in place unpatched or unsupported systems that are highly vulnerable to attackers. Even if a manufacturer patches “all” vulnerabilities and secures “all” borders, the hackers are already on to the next vulnerability. Thus, the never-ending game of whack-a-mole. Vigilance is key!

Manufacturing: The Road Ahead

For an interactive session on managing your business’s cyber risk in the age of IoT, make plans to join Foley in Milwaukee on May 9th for our next Midwest Cyber Security Alliance meeting. For event details, contact Foley’s Midwest Cyber Security Alliance co-founder, Jennifer Rathburn.

Foley Resources

]]>https://www.autoindustrylawblog.com/2019/04/25/manufacturing-markettrends-april-2019-issue-1/feed/0https://www.autoindustrylawblog.com/2019/04/25/manufacturing-markettrends-april-2019-issue-1/Brexit … Exit or No Exit?http://feeds.lexblog.com/~r/dashboardinsights/full/~3/XzdivWF_YRM/
https://www.autoindustrylawblog.com/2019/04/23/brexit-exit-or-no-exit/#respondTue, 23 Apr 2019 08:00:26 +0000https://www.autoindustrylawblog.com/?p=3943
Almost three years after the UK’s 2016 referendum to exit the EU (“Brexit”), there is no UK agreement on the substantive terms of exit or its timing. It is clear, however, that Brexit is causing devastating economic loss and unemployment, particularly in UK’s motor vehicle industry. The exit plan agreed to by UK/EU leaders has...… Continue reading this entry]]>

Almost three years after the UK’s 2016 referendum to exit the EU (“Brexit”), there is no UK agreement on the substantive terms of exit or its timing. It is clear, however, that Brexit is causing devastating economic loss and unemployment, particularly in UK’s motor vehicle industry.

The exit plan agreed to by UK/EU leaders has been repeatedly rejected by Parliament. That plan has now been split into two parts – a withdrawal agreement (the legally binding terms of exit – how much the UK must pay to leave and a two-year transition providing for status quo on trade, travel/treatment of UK/EU citizens) as well as a political declaration (the future relationship with the EU). Deadlines have come and gone. Even the UK Prime Minister’s promise to resign if the plan were approved hasn’t moved the ball closer to the goal. As the latest deadline approached, the EU granted the UK an option to leave at any time before October 31 if the withdrawal plan were approved, thus avoiding a “hard exit” that would otherwise occur. While the EU clearly prefers an agreed-upon exit, EU patience is running out.

This spectacle reminds one of Jean-Paul Sartre’s play “No Exit” in which three bickering characters find themselves punished in the afterlife by being locked in a room together for eternity. Stay tuned!

Negative economic consequences of Brexit for the UK are everywhere apparent – reduced competitiveness, escalating unemployment, brain drain and capital flight. The UK motor vehicle industry – employing 856,000 people and accounting for more than 5% of total UK GDP – is particularly hard hit. In 2018, investment dropped 46.5% from 2017 and vehicle production fell to its lowest level in 5 years. Multinational manufacturers are voting with their feet. Some companies are either idling/shuttering UK production or realigning their supply and distribution infrastructures outside the UK. The UK’s credibility as a safe and secure place for business has been badly damaged by the economic and political wreckage that the Brexit crisis has created.

]]>https://www.autoindustrylawblog.com/2019/04/23/brexit-exit-or-no-exit/feed/0https://www.autoindustrylawblog.com/2019/04/23/brexit-exit-or-no-exit/What to Look for When You Receive a NAFTA Origin Audit From Mexican Customs Authoritieshttp://feeds.lexblog.com/~r/dashboardinsights/full/~3/sazsws3QmJ8/
https://www.autoindustrylawblog.com/2019/04/18/what-to-look-for-when-you-receive-a-nafta-origin-audit-from-mexican-customs-authorities/#respondThu, 18 Apr 2019 08:00:25 +0000https://www.autoindustrylawblog.com/?p=3932
Since the enactment of the North American Free Trade Agreement (NAFTA), Mexican customs authorities have had the ability to conduct verifications to confirm the NAFTA origin of goods imported into Mexico (NAFTA origin audits). As the years have passed, however, verifications have become more frequent and sophisticated as to the information and documents authorities expect...… Continue reading this entry]]>

Since the enactment of the North American Free Trade Agreement (NAFTA), Mexican customs authorities have had the ability to conduct verifications to confirm the NAFTA origin of goods imported into Mexico (NAFTA origin audits). As the years have passed, however, verifications have become more frequent and sophisticated as to the information and documents authorities expect to receive as evidence to maintain preferential admission into the country.

NAFTA origin audits are usually conducted by requesting that an exporter or producer of the goods provide evidence through: (i) written questionnaires; (ii) visits to their premises; or (iii) written requests for particular information or documents.

In recent years, we have witnessed not only an increase in NAFTA origin audits performed by Mexican customs authorities on U.S. and Canadian exporting companies, but also a new focus on industries that in the past were considered “untouchable” because of their significant participation in Mexico´s growing exportations, such as the automotive and auto parts industries.

The reason for such an increase is likely that producers or exporters in NAFTA countries usually fail to demonstrate the origin of a product imported into Mexico with NAFTA preferential tariff treatment. As a consequence, importers are easily assessed with omitted duties and other related taxes. Please note that it is the importers that are hit with the penalties and not the foreign producers or exporters, who may then receive commercial complaints from their buyer-importers.

It is worth mentioning that NAFTA, as with all negotiated free trade agreements, seeks the elimination of tariffs on trade between the parties. That goal is achieved either through full exemption or a reduction of tariffs. When preferential tariff treatment is challenged by the authorities, it is exclusively confirmed when they receive sufficient evidence to verify that products entering their countries from other countries within the Free Trade Region comply with certain rules governing whether a product qualifies as originating (such rules are known as General and Specific Rules of Origin).

Rules of Origin can be considered either easy or complex, depending on whether a product is wholly obtained in a NAFTA country or results from a production process that integrates materials originating in the region with others imported from outside the region.

NAFTA obligates an importer to have, at the moment of importation, a certificate of origin issued by the exporter or producer of the goods demonstrating their NAFTA origin. There is a specific format established in NAFTA for certificates of origin.

An exporter or producer that completes and signs a NAFTA certificate of origin is obliged to maintain in its territory, for at least five years after the date at which the certificate was signed, all records related to the production and origin of a good for which preferential tariff treatment was claimed by an importer into the territory of another party.

Records to be kept by exporters or producers that are ordinarily requested by the Mexican customs authorities when conducting a NAFTA origin audit include evidence associated with: (i) the purchase, cost, value, and payment of the product being exported; and (ii) the purchase, cost, value, and payment of all materials, including indirect materials, used in the production of the exported product; (iii) the production of the good; and (iv) compliance with the applicable rule of origin.

When conducting NAFTA origin audits, Mexican customs authorities typically will only confirm that a particular product is NAFTA originating if exporters or producers produce evidence demonstrating not only the source of the materials used in the production process and compliance with the rule of origin, but also that the specific materials purchased from a particular supplier with certain characteristics and price were the ones incorporated into the products exported to Mexico for which a preferential tariff treatment was claimed.

Therefore, Mexican customs authorities expect to receive not just records and documents pertaining to the purchase of materials and the sale of the finished product to an importer in Mexico, but also records pertaining to the inventory of materials, purchase orders (POs) of Mexican importers, production orders related to such POs, including consumption reports of the materials, production costs, and a detailed explanation of the production process and compliance with the applicable rule of origin.

Consequently, U.S. and Canadian exporters or producers that are audited by Mexican customs authorities for NAFTA origin purposes must take care not only to keep all of the above mentioned records, but also to timely deliver them upon request (which is usually issued in Spanish) and to provide any additional details and comprehensive explanations that will demonstrate the origin of the products imported into Mexico with preferential tariff treatment.

]]>https://www.autoindustrylawblog.com/2019/04/18/what-to-look-for-when-you-receive-a-nafta-origin-audit-from-mexican-customs-authorities/feed/0https://www.autoindustrylawblog.com/2019/04/18/what-to-look-for-when-you-receive-a-nafta-origin-audit-from-mexican-customs-authorities/April Showers Bring May … Scooters?http://feeds.lexblog.com/~r/dashboardinsights/full/~3/Y2-LOAGZ-6U/
https://www.autoindustrylawblog.com/2019/04/16/april-showers-bring-may-scooters/#respondTue, 16 Apr 2019 08:00:29 +0000https://www.autoindustrylawblog.com/?p=3927
As cities prepare for not only the return of every park-visitor’s favorite seasonal bird, the menace known as the Canadian Goose, cities are also bracing for the seasonal arrival of scooter sharing services like Lime, Bird, Spin and their competitors along their curbs and on street corners throughout urban cores. Unlike the Canadian Goose, which...… Continue reading this entry]]>

As cities prepare for not only the return of every park-visitor’s favorite seasonal bird, the menace known as the Canadian Goose, cities are also bracing for the seasonal arrival of scooter sharing services like Lime, Bird, Spin and their competitors along their curbs and on street corners throughout urban cores. Unlike the Canadian Goose, which does what it wants, when it wants, to whomever it wants to, cities are looking to not only reign in usage and set rules for operations, but also work with scooter sharing services as they struggle to tackle the Last Mile Issue plaguing cities around the world. A major component of this initiative includes maximizing the potential revenue cities and scooter companies can generate in an already congested urban fabric through fees and optimized usage patterns. We discussed the Last Mile Issue in our May 2018 blog post, Ride Sharing and Cities Team Up on Transit, Last Mile Issues. Unlike our recent post on Congestion Pricing, cities and scooter companies are looking to use data not to necessarily discourage usage in certain areas, but rather identify usage patterns and optimize placement in a way to be both effective for consumers and commuters, alike.

In recent weeks, the cities of Detroit, Charlotte and Omaha have announced their plans to begin aggregating and studying use and traffic patterns associated with scooter sharing services. This will include ride duration, scooter usage, parking patterns and curbside utilizations throughout their cities. Lime has noted that the intended goal of this partnership is “to both determine the right fleet size through data and jointly achieve mode shift, sustainability and accessibility objectives” in their partner cities.

In forming a partnership between Lime, Passport, and City of Detroit, Detroit was looking to tackle the high concentration of scooters in the urban core, at the expense of surrounding neighborhoods. Realizing that scooters cater to both urban tourists and commuters, Detroit and other cities are struggling to optimize their distribution while still catering to all interested parties.

Although Detroit has capped any one scooter company at 400 total scooters within the city limits, the city plans to use the data to monitor “how our citizens are using these new forms of mobility and be more strategic about managing scooters using supply/demand economics”. Although Detroit’s initial policy required at least 100 scooters be placed outside of the Downtown and Midtown neighborhoods, noticed that most scooters would concentrate around the urban core by mid-day, often creating a transit vacuum in surrounding neighborhoods. By incentivizing riders and companies to redistribute scooters throughout the city, Detroit hopes to “create a fee scheme for where the scooters are dropped that would incentivize companies to more strategically locate their scooters” in areas that would better serve consumers in both a transit and tourist approach.

It has yet to be seen if optimized pricing and incentives will alter company and consumer behavior towards a more equitable and efficient transit marketplace, but the cities are hopeful for future initiatives. Cities hope that with more data and better management through Congestion Pricing of city-center traffic and Dynamic Pricing of Transit 2.0 initiatives will not only be better for consumers overall, enable cities to optimize the “design [of] infrastructure that can help shared mobility services grow safely and sustainably”.

]]>https://www.autoindustrylawblog.com/2019/04/16/april-showers-bring-may-scooters/feed/0https://www.autoindustrylawblog.com/2019/04/16/april-showers-bring-may-scooters/Right Tool, Right Job: Smart Manufacturing Requires Focus on Intellectual Propertyhttp://feeds.lexblog.com/~r/dashboardinsights/full/~3/R5r-91MwEiQ/
https://www.autoindustrylawblog.com/2019/04/11/right-tool-right-job-smart-manufacturing-requires-focus-on-intellectual-property/#respondThu, 11 Apr 2019 08:00:36 +0000https://www.autoindustrylawblog.com/?p=3924
The transition from traditional manufacturing techniques and technologies to techniques leveraging automation and data exchange technologies, cyber-physical systems, the Internet of things, cloud computing and cognitive computing, sometimes referred to as “Industry 4.0,” holds great promise for manufacturers but, like any change, also holds dangers for the unwary. In the same way that the...… Continue reading this entry]]>

The transition from traditional manufacturing techniques and technologies to techniques leveraging automation and data exchange technologies, cyber-physical systems, the Internet of things, cloud computing and cognitive computing, sometimes referred to as “Industry 4.0,” holds great promise for manufacturers but, like any change, also holds dangers for the unwary.

In the same way that the transition of supply chain and manufacturing operations to a digital, interconnected environment requires new tools, or the use of old tools in new ways, the transition to this new digital environment requires manufacturers to be aware of the expansion of intellectual property rights relevant to a manufacturer’s operations. Failure to carefully monitor and manage intellectual property considerations in this new environment may result in significant risks.

Traditional manufacturing techniques typically rely on shipping raw materials and hardware from one physical location to another and assembling a finished product using stand-alone machines before, again, shipping the finished product to its ultimate destination. In this environment, it is natural to rely on trade secrets to protect proprietary aspects of the manufacturing process by, for example, limiting personnel access to the production floor and requiring employees and suppliers to enter into non-disclosure agreements because the manufacturing processes are inextricably associated with a specific physical location.

The growth of additive manufacturing techniques is one aspect of Industry 4.0 that has the potential to affect operations across the production chain and broadens the intellectual property issues that a manufacturer must consider. Additive manufacturing changes the business calculus around lead time, shipping cost, inventory requirements and transport uncertainty because a digital file can be sent nearly instantaneously to a party that is close to a manufacturing site or customer, rather than shipping sub-assemblies or completed products over large distances. In the same way, however, that additive manufacturing changes the business calculus, it also changes the intellectual property considerations incumbent on a manufacturer.

A recent example of this kind of change is United States Patent No. 10216171, “3-D Printing Protected by Digital Rights Management,” issued February 26, 2019 to Accenture Global Services Limited. The ‘171 patent purports to cover methods, systems and apparatus, including computer programs encoded on a computer storage medium, for managing 3-D printing. Independent claim 1 of the ‘171 patent is quite long, prohibiting its verbatim recitation here, but the ‘171 patent is available online from the www.uspto.gov or www.patents.google.com. In broad summary, the ‘171 patent claims a computer-implemented method that associates a digital rights file with a printable object that keeps track of the number of times an object has been printed and only allowing the object to be printed as long as the number of prints is below an allowed threshold.

It is self-evident that ability to control the number of physical items manufactured from a digital file is of vital importance to entities that manufacture replacement parts or subassemblies. It is also possible that a manufacturer could use such techniques to allow customers to buy a product and 3-D print it themselves, since the file can be used only a certain number of times. With the issuance of the ‘171 patent, a manufacturer should now consider whether their deployment of a system that limits the number of times a file can be used to create a physical item through additive manufacturing may infringe the claims of the ‘171 patent. A manufacturer may want to receive an opinion of counsel that their system does not infringe the ‘171 patent, as well as whether the ‘171 patent has, in fact, been validly issued by the United States Patent and Trademark Office.

Invalidity of a patent is also a defense to infringement and that defense can be raised not only in litigation, but in reexamination proceedings before the US Patent Office, as well. Moreover, manufacturers may want to consider, in view of the issuance of the ‘171 patent, whether they are doing enough to generate intellectual property protecting their own proprietary techniques.

Some may argue that these sorts of considerations are not new to manufacturers. However, the environment for manufacturers is changing and it may not always be readily apparent when an “old” tool needs to be used in a new situation. Manufacturers must remain vigilant for opportunities and threats presented by Industry 4.0.

]]>https://www.autoindustrylawblog.com/2019/04/11/right-tool-right-job-smart-manufacturing-requires-focus-on-intellectual-property/feed/0https://www.autoindustrylawblog.com/2019/04/11/right-tool-right-job-smart-manufacturing-requires-focus-on-intellectual-property/Electric Cars: Charging Ahead or Losing Speed?http://feeds.lexblog.com/~r/dashboardinsights/full/~3/87QAHmxlNBI/
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Anyone following electric vehicle news in the past several months may feel like they are watching a yo-yo: first one analyst will predict an EV boom, and then another analyst will predict an EV sales slowdown. However, despite the differences of opinion on short term sales, signs continue to point to long term sustained growth...… Continue reading this entry]]>

Anyone following electric vehicle news in the past several months may feel like they are watching a yo-yo: first one analyst will predict an EV boom, and then another analyst will predict an EV sales slowdown. However, despite the differences of opinion on short term sales, signs continue to point to long term sustained growth in EVs sales.

This trend is supported by the current global race for EV and battery cell production. One research analyst predicted EV sales to grow from 1.5 million units in 2018 to 10.79 million units in 2025. This provides a significant market opportunity for those companies and countries that can plan for the shift ahead.

The hot bed of electric vehicles has long been China, largely buoyed by generous government subsidies of EVs. As discussed in the Economist, China is betting big on EVs, and is eyeing the predicted decline in internal combustion engine sales as an opportunity to dominate future car sales through EVs. Beijing Electric Vehicle Co. is now the world’s No. 2 manufacturer of electric vehicles behind Tesla. China saw a 62% increase in EV sales in 2018.

Although the news in the last several months has proclaimed China as slashing EV subsidies, the truth is China is reallocating resources to globally expand. As previously discussed on this blog, China revised its generous domestic EV subsidies to reduce (and eventually phase out) subsidies on vehicles that go less than 150 km, and instead to focus more subsidies on vehicles with at least 400 km in range. This effect should increase China’s EV sales around the world by pushing Chinese manufacturers toward EVs that can ultimately be exported.

Now, as reported in Fortune, Germany is entering the EV race by betting on the electric car batteries that fuel this boom. Currently, Chinese firms sell the vast majority of global EV batteries. But last fall, the German government set aside 1 billion euros to support German manufacturing of battery cells, with a goal of 30% global market share by 2030. Germany is looking to leverage its automotive industry and chemical manufacturing expertise to catch up to Asian battery makers, and is now entertaining approximately 30 bids for the government aid.

And of course, no EV discussion is complete without discussing the biggest player in the market—Tesla. Although Tesla reported a 61% sales drop in the United States in the first quarter, Tesla Model 3 was the top selling luxury car in the United States in 2018. At least in part, the sales drop was due to logistical challenges, rather than a decrease in demand. Tesla’s executives remain optimistic about meeting the company’s projections for 2019. However, if the Untied States wants to remain competitive, it will need to focus on incentives to spur EV investment and production. Although certain tax incentives are already in place, a recent paper by Progressive Policy Institute proposes a framework to expand and improve tax credits for consumer purchases of EVs—not unlike the subsidies already used in China to spur growth in EVs there.

Who will win the global EV race remains to be seen. However, the long term outlook for EVs is almost universally acknowledged, and companies that invest in the industry stand to reap significant rewards.

]]>https://www.autoindustrylawblog.com/2019/04/09/electric-cars-charging-ahead-or-losing-speed/feed/0https://www.autoindustrylawblog.com/2019/04/09/electric-cars-charging-ahead-or-losing-speed/AI is Here to Stay: Are You Prepared?http://feeds.lexblog.com/~r/dashboardinsights/full/~3/eXFsjwwJ8sM/
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Machine Learning. Deep Learning. Data Mining. Predictive Analytics. Natural Language Processing. These are the buzzwords used to describe the pivotal artificial intelligence (AI) space. Companies in every industry, from automotive and electronics to financial services, health care and life sciences, are working to deploy these advanced technology methods in order to bring their innovations to...… Continue reading this entry]]>

These are the buzzwords used to describe the pivotal artificial intelligence (AI) space. Companies in every industry, from automotive and electronics to financial services, health care and life sciences, are working to deploy these advanced technology methods in order to bring their innovations to the next level. AI can help pathologists identify diseases, and physicians better assess brain health. It can help bankers automate back-office processes, create more lifelike chatbots, and improve fair lending practices. It can process and collect data more efficiently, protect from cyberattacks, and improve driver safety. As with any disruptive technology, however, this AI race to the moon comes with its share of risks and challenges. Are you prepared to address the various issues that this new technology may bring?

That is just the tip of the iceberg. As one security professional put it: “For large countries, growing and investing in AI is now a matter of national security and longevity. It’s the next natural resource.” Developing AI safely, legally, and efficiently is an uphill battle that — if navigated incorrectly — could result in a disappointing, if not outright dangerous, assortment of missed opportunities, according to Foley & Lardner LLP’s AI Report, which features qualitative research and conversations with startup founders, business executives, and attorneys at Foley working with AI on:

The Dangers of Hype

Access to Quality Data

An Uncertain Regulatory Landscape

The Intellectual Property Conundrum

More Data, More Privacy Concerns

The Double-Edged Sword of Cybersecurity

The Talent Gap

At the end of the day, AI, like all technology, is resolutely human. But that doesn’t mean it can’t improve society. If we seize the AI opportunity thoughtfully — with humanity, ethics, education, testing, and due diligence across organizations and functionalities — perhaps we can, as Michael Campos, research scientist and director of IP at NetraDyne Inc., suggests, “make systems that are a little better than we are.”